Quick Read
- Krispy Kreme’s DNUT stock rose 14% on October 21, closing at $3.71.
- The company ended its McDonald’s USA partnership in July, exiting 2,400 locations and seeing a 21% drop in U.S. revenue.
- Q2 2025 saw a 13.5% revenue decline and a $441.1 million net loss, mostly due to impairment charges.
- Krispy Kreme is pursuing aggressive international expansion, with new stores in Spain, Brazil, and Uzbekistan.
- Analysts remain cautious, with most rating the stock as ‘hold’ amid volatile momentum.
DNUT Stock Jumps as Krispy Kreme Bets Big on Global Growth
On October 21, Krispy Kreme’s DNUT stock staged a dramatic turnaround, closing up 14% at $3.71. This pop offered a rare moment of relief for investors, who have watched the doughnut chain’s shares tumble more than 65% year-to-date from highs above $12 in late 2024. The catalyst? Ambitious international expansion plans that promise new markets and fresh revenue streams.
But beneath the surface, the story is far more complex. The company’s American business is struggling, and the recent rally may be more about hope than fundamentals. As Krispy Kreme pivots toward global franchising, questions linger about whether this strategy can truly offset its domestic woes.
Why Did DNUT Surge—and What’s Behind the Numbers?
The 14% spike followed Krispy Kreme’s announcement of new openings in Spain, Brazil, and Uzbekistan. On October 2, the company celebrated its first Spanish location in Madrid, a move CEO Josh Charlesworth described as strengthening their international presence. Plans are underway for two more shops in Madrid before year’s end, with a goal of over 50 stores across Spain within four years.
International sales are now a bright spot. Revenues outside the U.S. grew about 6% year-over-year, with Canada, Japan, and Mexico leading the charge. Krispy Kreme’s model in these countries leans heavily on franchising—a capital-light approach that allows rapid expansion with lower upfront costs. As Charlesworth put it, “From Spain to Brazil to Uzbekistan, we love seeing the excitement from fans around the world as they enjoy our fresh, delicious treats.”
Yet, the excitement masks a tough domestic reality. The company ended its unprofitable partnership with McDonald’s USA in July 2025, exiting roughly 2,400 locations. The fallout was immediate: U.S. segment revenue plunged 21% year-over-year in Q2. Overall, Krispy Kreme’s Q2 2025 revenue dropped 13.5% to $379.8 million, and the company reported a staggering $441.1 million GAAP loss, with $406.9 million attributed to impairment charges—essentially write-downs reflecting diminished asset value.
Turnaround Plan: Can Krispy Kreme Regain Its Footing?
In response, management unveiled a four-part turnaround strategy in August. The plan aims to:
- Refranchise company-owned international markets and restructure joint ventures.
- Optimize asset use to improve returns.
- Cut U.S. costs by outsourcing logistics.
- Focus domestic growth on high-margin, high-volume channels.
The leadership team also saw a shake-up. Raphael Duvivier, previously International President, stepped in as CFO, while Alison Holder took on an expanded brand role. These changes signal a renewed focus on marketing and product innovation—a critical move in a competitive food industry.
Charlesworth told investors the company expects to begin recovering profitability in Q3, with a “profitable U.S. expansion and capital-light international franchise growth” approach. In plain language: the company is betting it can do more with less, leveraging franchises abroad while targeting lucrative segments at home.
Wall Street’s Take: Cautious Optimism or Meme-Stock Mania?
Despite the recent bounce, analysts remain skeptical. Morgan Stanley highlighted Krispy Kreme as Q3’s top-performing restaurant stock, with a 33% gain in the period. Yet, it maintains an ‘Underweight’ rating and a $2.50 price target—33% below current levels. The average analyst target sits at $6.45, well above the current price but far off past highs.
Zacks recently shifted to a “strong sell” rating, while JPMorgan continues to advise caution. Most experts rate the stock as a “hold,” reflecting a wait-and-see stance amid uncertain prospects. Some compare the recent surge to the meme-stock craze of 2021, warning that sharp rallies disconnected from fundamentals can reverse violently.
Daniela Sabin Hathorn of Capital.com cautioned: “These surges are often disconnected from company fundamentals and can reverse violently.” For retail investors, it’s a reminder that momentum-driven gains can evaporate as quickly as they appear.
What’s Next for DNUT—and For Investors?
Krispy Kreme’s global push is gathering speed. The company now operates in more than 40 countries, and new markets like Spain and Uzbekistan could provide a much-needed revenue boost. In Brazil, a joint venture is bringing two new outlets to São Paulo, while the Tashkent shop marks a foray into Central Asia.
Domestically, the company faces a steeper climb. The collapse of the McDonald’s partnership and weak U.S. sales highlight structural challenges. The turnaround plan will require disciplined execution and perhaps a bit of luck. If international franchising delivers as hoped, it could stabilize the business. But if domestic troubles deepen, even global growth may not be enough.
For now, DNUT’s rally is a story of cautious optimism—one driven by expansion dreams, but shadowed by financial reality.
Assessment: Krispy Kreme’s international strategy has sparked a short-term stock surge and offers a promising path for growth, but with heavy domestic losses and analyst skepticism, sustainable recovery will hinge on successful execution abroad and a disciplined turnaround at home. The company’s future rests on whether its global ambitions can compensate for challenges in its core U.S. market.